COVERED COMBINATION	PROTECTIVE CALL
About Strategy	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un Read more..	Protective Call Option Strategy This strategy is simply the reversal of the Synthetic Call Strategy. This strategy is implemented when a trader is bearish on the market and expects to go down. Trader will short underlying stock in the cash market and buy either an ATM Call Option or OTM Call Option. The Call Option is bought to protect / hedge the upside risk on the short position. The .. Read more..

COVERED COMBINATION Vs PROTECTIVE CALL - Details

	COVERED COMBINATION	PROTECTIVE CALL
Market View	Bullish	Bearish
Type (CE/PE)	CE (Call Option) + PE (Put Option)	CE (Call Option)
Number Of Positions	2	1
Strategy Level	Advance	Beginners
Reward Profile	Limited	Unlimited
Risk Profile	Unlimited	Limited
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Sale Price of Underlying + Premium Paid

COVERED COMBINATION Vs PROTECTIVE CALL - When & How to use ?

	COVERED COMBINATION	PROTECTIVE CALL
Market View	Bullish	Bearish
When to use?	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.	This strategy is implemented when a trader is bearish on the market and expects to go down.
Action	Sell 1 OTM Call, Sell 1 OTM Put	Buy 1 ATM Call
Breakeven Point	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2	Sale Price of Underlying + Premium Paid

COVERED COMBINATION Vs PROTECTIVE CALL - Risk & Reward

	COVERED COMBINATION	PROTECTIVE CALL
Maximum Profit Scenario	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid	Sale Price of Underlying - Price of Underlying - Premium Paid
Maximum Loss Scenario	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid	Premium Paid + Call Strike Price - Sale Price of Underlying + Commissions Paid
Risk	Unlimited	Limited
Reward	Limited	Unlimited

COVERED COMBINATION Vs PROTECTIVE CALL - Strategy Pros & Cons

	COVERED COMBINATION	PROTECTIVE CALL
Similar Strategies	Stock Repair Strategy	Put Backspread, Long Put
Disadvantage	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.	• Profitable when market moves as expected. • Not good for beginners.
Advantages	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.	• Limited risk if the market moves in opposite direction as expected. • Allows you to keep open a profitable position to make further profits. • Unlimited profit potential.